Corporate Earnings Boost Global Markets -- Update
Stocks start the week higher
-- Metals prices jump after China data
-- Dollar edges up from lowest since September
Global stocks started the week a touch higher, supported by better-than-expected corporate results and a climb in commodity prices.
The Stoxx Europe 600 edged up 0.3% in morning trading from its lowest close since April, following gains in Hong Kong. Futures pointed to a 0.1% opening gain for the S&P 500 and 0.2% advances for the Dow Jones Industrial Average and the Nasdaq.
Shares of index heavyweight HSBC Holdings PLC climbed 2.8%, leading gains in Europe's banking sector, after the global lender beat profit forecasts and announced plans for a $2 billion share buyback in the second half of the year.
"It's one of those key stocks that benefits from Asian growth and global growth, and we're seeing a lot of that," said Gautam Batra, head of investments at Mediolanum Asset Management.
Corporate earnings reports have broadly been supportive of stock markets this month, particularly in the U.S. More than 73% of S&P 500 companies have beat analysts' estimates for second-quarter earnings so far, with the same percentage also beating forecasts for revenue.
"That's surprising for many people," said John Manley, chief equity strategist at Wells Fargo Funds Management. "People thought profits couldn't go higher and they're being proved wrong."
The S&P 500 is now on track to end the month around 2% higher. Over the past 30 years, August has been U.S. stocks' worst month, as summer vacations in the Northern Hemisphere sap market liquidity.
On Monday, metals prices also moved higher, supporting shares of mining companies in Europe and Asia. Three-month copper futures in London were up 0.8% at $6,397 a ton, near a two-year high, while Chinese iron-ore futures hit their best levels in about four months after an official gauge of Chinese manufacturing activity showed a sharper-than-expected decline but remained in expansionary territory. Growth in construction was a bright spot, with the sector's subindex rising to its highest level since December 2013 due to government-backed infrastructure spending.
In government bonds, yields on 10-year U.S. Treasurys edged down to 2.286% from 2.291% on Friday, while German bund yields fell to 0.537% from 0.543% ahead of a reading on eurozone inflation due later in the morning. Yields move inversely to prices.
The euro edged down 0.2% to $1.1732.
Earlier, Asian stock markets climbed in late trading to conclude a robust month for most major bourses in the region.
Hong Kong's Hang Seng Index was up 1.3% on Monday amid gains in technology companies and banks, on track to end the month around 6.1% higher. The index hasn't logged a monthly decline this year, its longest winning streak since 2007.
A solid start to earnings season and higher commodity prices helped stocks but there have been losses more recently as the possibility of tax and infrastructure overhauls in the has U.S. faded, said Hao Hong, head of research at Bocom International in Hong Kong.
The Shanghai Composite Index was up 0.6%, on track for a monthly gain of 2.5%.
Monday's stock trading was also colored by last week's declines in the dollar, which finished Friday at its lowest level since September. The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was last up 0.1%.
Japan's Nikkei was down 0.2%, on track for its first monthly loss since March, as the currency has strengthened around 1.5% against the dollar since the start of July.
But a number of exporter and electronics stocks, which typically fall when the yen strengthens, rose Monday helped by strong earnings growth from Hitachi and Kyocera, whose shares hit their best levels in two years.
Australia's S&P/ASX 200 rose 0.3% on commodity-stock strength. BHP Billiton and Rio Tinto jumped over 2%, in line with the jump in Chinese iron-ore futures.
Investors showed little reaction to the missile firing by North Korea. South Korea's Kospi, which posted its biggest decline of the year on Friday, was up 0.1% on Monday.
Biman Mukherji and Grace Zhu contributed to this article.
Write to Riva Gold at riva.gold@wsj.com and Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
July 31, 2017 05:21 ET (09:21 GMT)